Year-end shopping, positive indications from consumer cyclical
Last Update: 25/12/2024
Looking at the consumer cyclical sector can offer useful insights into year-end shopping trends. This sector, which includes nonessential goods such as clothing, electronics and entertainment, tends to benefit from increased spending during the holidays, supported by discounts and promotions.
Looking at this weeks’ data, everything seems to give positive indications for the holiday shopping that begins today with Black Friday. The consumer cyclical sector, after months of weakness, is now doing better than the S&P500 index. We see this in the chart below, with the strength indicator punching upward through the long-term average in late October and then accelerating to the upside.
Also telling is the graph regarding the strength ratio of consumer cyclical to consumer defensive, an indicator of consumer sentiment. It shows how the index points sharply upward since early September. The indication seems in line with the latest consumer confidence surveys (Michigan and CB).
